Former NY State Senator Pleads Guilty To Tax Fraud

October 12, 2012

NEW YORK - Former state Sen. Pedro Espada Jr. pleaded guilty to tax fraud on Friday in a deal that resolved separate criminal charges that doomed the once-influential politician's career.

Espada, 58, admitted in federal court in Brooklyn that he purposely underreported his income on a tax return for 2006. The return listed his income as $297,630, but Espada told the judge he "knew the number to be excess of that."

A jury convicted Espada earlier this year on separate charges alleging he looted taxpayer-subsidized health clinics for the poor, but deadlocked on four counts. Under the terms of Friday's tax fraud plea, prosecutors won't seek a retrial on those embezzlement counts.

The Bronx Democrat will remain free on bail until sentencing on Feb. 22. He faces a possible sentence of more than seven years in prison under federal guidelines, though his lawyer said he would argue for a lesser term.

The ex-senator's son, Pedro Gautier Espada, also pleaded guilty Friday to stealing federal funds for Soundview Healthcare Network and to failing to file a tax return.

The father, and later his son, operated the clinics in the South Bronx for three decades until prosecutors accused them of turning the network into a personal ATM.

The Soundview clinics "were unable to pay personnel and could not obtain vital medical equipment, because (Pedro) Espada siphoned off funds to pay for luxury cars, spa treatments, sushi dinners and vacations," U.S. Attorney Loretta Lynch said in a statement. The pleas, she added, "illustrate that the defendants were brought down by their own greed."

Before his downfall, Espada had risen from a poor street fighter in Puerto Rico to a Fordham University graduate to bold manipulator of Albany's old-boy political power structure.